Let's start with a bomb. Over 10 days ago a new brand of coup d'etat took place in Paraguay against elected president Fernando Lugo. It was virtually unnoticed by global corporate media.

Anything unexpected? Not really. A March 2009 cable from the US Embassy in Asuncion, revealed by WikiLeaks, [1] had already detailed how oligarchs in Paraguay were busy devising a "democratic coup" in congress to depose Lugo.

At the time, the US embassy noted political conditions were not ideal for a coup. Key among the plotters was former president Nicanor Duarte (2003 to 2008), severely bashed by progressive South American governments for having allowed US Special Forces in Paraguayan soil to conduct "educational courses", "domestic peacekeeping operations" and "counter-terrorism training".

This US Special Forces drive was happening decades after "one of our bastards", notorious dictator-general Alfredo Stroessner (in power from 1954 to 1989) had allowed the set up of a giant US-owned semi-clandestine landing strip near the Argentina-Brazil-Paraguay Triple Border - later to become part of the war on drugs, and then the war on terror.

So it's a no-brainer which was the first government to recognize last Friday's coup plotters in Paraguay: the United States of America.

Forget about sharing our cake

Progressive Egyptians are now realizing new democracies take years, sometimes decades, of co-existing with the nightmare of dictatorship. It happened, for instance, in Brazil - now universally lauded as a new, global powerhouse. During the 1980s and 1990s, some form of institutional re-democratization was going on. But for years Brazil really did not turn into a full democracy - economically, socially and culturally. It took a long 17 years - until president Luiz Inacio Lula da Silva first came to power in 2002 - for Brazil to start on the road of becoming less outrageously unequal than its rapacious ruling classes always wanted it to be.

The same historical process is now at work in both Egypt and Paraguay. Both countries suffered dictatorships for decades. When a dictatorship seems to be on its death throes, only political parties linked - or mildly tolerated - by the ancien regime find themselves in the best position to profit from the long, tortuous transition towards democracy. These countries then become what Brazilian political scientist Emir Sader has dubbed "democraships".

This applies to the Liberal Party in Paraguay and the Muslim Brotherhood in Egypt. In the Egyptian presidential election, we had a former Hosni Mubarak crony against an Ikhwan (Muslim Brotherhood) cadre. It remains to be seen whether the Orwellian SCAF (Supreme Council of the Armed Forces) in Egypt will allow this new "democraship" to turn into a real democracy, and to what extent the Ikhwan is fully committed to the notion of democracy.

Paraguay was already in a more advanced stage than Egypt. Yet four years after a democratic presidential election, congress was still dominated by two dictatorship-friendly parties, Liberal and Colorado. It was a piece of cake for this bipartisan oligarchy to gang up and take Lugo down.

A medium-rare impeachment, please

Lugo was evicted by a coup disguised as an impeachment, processed in only 24 hours. Regime change practitioners in Washington must have been ecstatic; if only we could do that in Syria ...

This simulacrum had to be concocted by what is the most corrupt senate in the Americas - and that's a huge understatement. Lugo was found guilty of incompetence in dealing with a very murky story linked - inevitably - with an issue that is absolutely key all across the developing world: agrarian reform.

On June 15, a group of policemen and commandos about to enforce an eviction order in Curuguaty, 200 kilometers from Asuncion, close to the Brazilian border, was ambushed by snipers infiltrated among farmers. The order came from a judge protecting a wealthy landowner, Blas Riquelme, not by accident a former president of the Colorado party and a former senator.

Through legal shenanigans, he had taken possession of 2,000 hectares that actually belonged to the Paraguayan state. These lands were then occupied by landless peasants, who for some time had been asking the Lugo government to redistribute them.

The School of the Americas Watch has already documented how enormous tracts of land in Paraguay were actually stolen from farmers and "donated" to military and upper-class cronies during those decades under the Stroessner dictatorship.

The result in Curuguaty was 17 dead - six policemen and 11 farmers - and at least 50 wounded. It simply doesn't make sense; the elite members of the eviction force, a hardcore unit named Special Operations Group, were trained in counterinsurgency tactics in Colombia - under the right-wing Uribe government - as part of the US-concocted Plan Colombia.

Plan Paraguay, for its part, was very simple; absolute criminalization of every peasant organization, forcing them to leave the countryside for transnational agribusiness.

So this was, essentially, a trap. Paraguay's rabid right-wingers - joined to the hip with Washington, for example trying to prevent, by all means, Venezuela's entrance into the Mercosur common market - were just waiting to pounce on a regime that had not, yet, affected its interests, but had opened up plenty of spaces for social protest and popular organization.

Lugo, a former bishop elected in 2008 with large rural support, might have seen it coming, but he did nothing to stop it. Compared with his power to mobilize people in the streets, he had minimum support in Congress: only two senators. Over 40% of Paraguayans live in the countryside, but they are hardly mobilized. And 30% live under the poverty line.

The "winners" in Paraguay had to be the usual suspects: the landowning oligarchy - and its concerted campaign to demonize farmers; multinational agribusiness interests such as Monsanto; and the Monsanto-linked media (as in the ABC Color daily, which accused ministers not acting as Monsanto stooges of being "corrupt").

Agribusiness giants such as Monsanto and Cargill pay virtually no taxes in Paraguay because of the right-wing controlled Congress. Landowners don't pay taxes. Needless to add, Paraguay is one of the most unequal countries in the world; 85% of land - like 30 million hectares - is controlled by the 2% composing the rural aristocracy, a great deal of them involved in land speculation.

Thus their Miami Vice-style mansions in Uruguay's hip Punta del Este resort or, for that matter, Miami Beach; the money, of course, is in the Cayman islands. Paraguay is de facto ruled by this cream of the 2% mixing agribusiness with the neoliberal financial casino.

And by the way, as Martin Almada, a top Paraguayan human-rights activist and alternative Nobel Peace Prize winner, has noted, this concerns Brazilian landowners as well. The wealthiest soya bean producer in Paraguay is a "Braziguayan", double nationality holder Tranquilo Favero, who made his fortune under Stroessner.

A coup on the rocks, please

The Union of South American Nations (Unasur) treated what happened in Paraguay for what it is; a coup. Same with Mercosur. The contrast with Washington's position couldn't be more glaring. Coup plotter Federico Franco is a darling of the US Embassy in Asuncion.

Argentina, Uruguay, Venezuela and Ecuador won't recognize the coup plotters. Venezuela cut off oil sales to Paraguay. Brazilian President Dilma Rousseff has proposed the expulsion of Paraguay from both Unasur and Mercosur.

Paraguay is already suspended; this means coup plotter Federico Franco was prevented from attending a key Mercosur meeting last week in Mendoza, Argentina, when the temporary Mercosur presidency would be handed over to Paraguay. The Paraguayan oligarchy - under Washington's orders - was blocking Venezuela's entrance in Mercosur. Not anymore; Venezuela becomes a full member by the end of the month.

Yet South American progressive governments must be very careful. If Paraguay is expelled from both Unasur and Mercosur, it will inevitably ask Washington for commercial and military help. That could translate into a nightmare - US military bases in Paraguay.

Paraguay's oligarchs, the media they control, and last but not least the reactionary Catholic church hierarchy, calculate they will extend their power when elections take place in April 2013.

Lugo was in fact facing a Sisyphean task - trying to steer a weak state, with minimum income from taxes (less than 12% of GNP), and under severe pressure by powerful transnational lobbies and comprador elites. This, by the way, is the structural reality of a great deal of Latin America - and, roughly, one might add, of Egypt.

On a geopolitical level, what progressives everywhere - from South and North America to the Arab world - should worry about is how, since the June 2009 coup against Manuel Zelaya in Honduras, Latin America is being turned into a giant laboratory testing all sorts of "democratic" coup d'etat mutations.

Paraguay is one such mutation. Another one was the failed coup against Ecuador's Rafael Correa in September 2010. All these coups are against progressive governments who privilege social advances.

Not by accident, Correa, who was almost evicted by a coup, said that if it succeeded this time in Paraguay it would "open a dangerous precedent" in the whole region.

And in terms of poetic justice, nothing beats Correa - the target of a coup - currently studying the possibility of offering political asylum to Julian Assange, whose WikiLeaks revealed, among other things, how the Paraguayan elite was plotting their own coup.

In Egypt, a military coup happened even before a presidential election. Progressive Egyptians who actually led the Arab Spring must be extremely alert; Paraguay is showing how the rocky road towards democracy may end up in a "democraship".

Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving into Liquid War (Nimble Books, 2007) and Red Zone Blues: a snapshot of Baghdad during the surge. His most recent book, just out, is Obama does Globalistan (Nimble Books, 2009).